Australia may face a rush of datacentre construction as AI firms look to dodge upcoming rules, experts say
Summary
Australia’s Prime Minister Anthony Albanese is working on new federal rules to manage datacentre construction, aiming to reduce their impact on power prices and water use. Projects approved before the new laws take effect next year will not have to follow the new rules, which may lead to a rush of approvals before the regulations start.Key Facts
- New rules will require datacentres to not increase power prices, use renewable energy to cover electricity needs, pay their own connection costs, and limit water use.
- Datacentres must be properly sized and located away from schools, homes, future housing, or farming areas.
- Projects approved before the new laws start next year will follow existing state or territory rules, not the new ones.
- There are currently 225 datacentre projects in development in Australia, with electricity demand expected to rise from 5 to 34 terawatt hours by 2036.
- Over 40% of reported datacentre projects since 2025 have been canceled or delayed.
- The New South Wales government is reviewing a 90MW datacentre called Project Mars near Sydney, which has faced community opposition.
- Some local groups and the Greens party want a pause on new datacentre approvals until the new federal rules are in place.
- Experts warn developers may rush to get approvals under old rules before new regulations start, but this could cause political problems for governments.
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